Domestic Affairs

On Sept. 7, 2006, British Prime Minister Tony Blair announced that he would step down within 12 months. He had been the first Labour Party leader to win three successive general election victories (the most recent in May 2005), but by the summer of 2006 a growing minority of Labour MPs regarded Blair as an electoral liability—not least because of his close relationship with U.S. Pres. George W. Bush, whom few Britons admired or respected. By mid-2006 Labour’s support in the opinion polls had fallen to 32–33%, and the party performed badly in parliamentary by-elections and local elections.

The main beneficiary of Labour’s weakness was the Conservative Party. David Cameron, who was elected Conservative leader in December 2005, spent much of 2006 seeking to shed his party’s right-wing image, which had dented its popularity for the previous 10 years. In contrast to his three predecessors, he emphasized that cutting taxes would not be a priority for the next Conservative government; economic stability and strong public services would come first. He also sought to put his party at the heart of the debates about civil liberties and climate change—causes previously more associated with politicians to the left of centre. Speaking to his party’s annual conference in October, Cameron told Conservative activists, “In these past 10 months we have moved back to the ground on which this Party’s success has always been built: the centre ground of British politics.”

Cameron’s energetic, moderate, and youthful appearance (he turned 40 in October) appealed to many voters. For the first time since 1992, the Conservatives established a sustained opinion-poll lead over Labour, averaging 5–7%. Over the previous 40 years, however, it had been common for opposition parties to achieve leads of 20% or more between general elections without necessarily going on to win the following election. By the end of 2006, many Conservatives recognized that while Cameron had made a good start, the party still had some way to go to secure the public’s respect.

Britain’s third party, the Liberal Democrats, had a more troubled year. On January 5 Charles Kennedy, the party leader since 1999, admitted to having had a drinking problem. Initially he hoped that he could remain party leader, but two days later he succumbed to intense pressure from a majority of his party’s MPs and resigned. The subsequent leadership contest was punctuated by the sudden withdrawal of one of the party’s leading MPs, Mark Oaten, when the Sunday newspaper News of the World produced evidence that he had had sex with “rent boys” (young male prostitutes). The leadership election was eventually won by the party’s deputy leader and foreign affairs spokesman, Sir Menzies Campbell, whose victory over economics spokesman Chris Huhne and party president Simon Hughes was announced on March 2.

At 65, Campbell was by far the oldest of the party leaders. Although he was widely respected at Westminster, especially for his grasp of international affairs and his principled criticism of the U.K.’s military involvement in Iraq, he proved to be a hesitant performer as leader in the House of Commons and had difficulty winning public approval. YouGov’s monthly opinion polls showed that only about 6% thought he would make the best prime minister of the three main party leaders, whereas Kennedy had occasionally scored more than 20%. Nevertheless, in by-elections the Liberal Democrats continued to do well, as voters wanted to register their disapproval with both the Labour and Conservative parties.

One cause of dissatisfaction with the government emerged in April when Charles Clarke, a generally well-regarded home secretary, admitted that more than 1,000 foreign prisoners had been released from British prisons without being considered for deportation. Clarke acknowledged that the National Audit Office (which monitored departmental spending) had warned ministers of the problem the previous July. It went unsolved, however, and 288 of the prisoners were released subsequently without being deported. Most had disappeared without a trace. Initially Clarke resisted demands for his resignation, arguing that the problem had persisted for many years. When Blair reshuffled his cabinet on May 5, the day after Labour’s poor performance in nationwide local elections, he asked Clarke to move to a different department. Clarke refused, and Blair sacked him.

Clarke’s successor, John Reid, swiftly made clear his dissatisfaction with his new department. On May 23 he told a committee of MPs that its immigration section was “not fit for purpose.” As Reid set about reorganizing the Home Office, he had to tackle three other issues that in turn dominated national debate. The first erupted unexpectedly on August 10 when Reid announced the arrest of 24 people suspected of plotting to destroy up to 10 aircraft flying from London’s Heathrow Airport to the U.S. The suspects had been under surveillance for some months; the decision to arrest them was taken when new intelligence information indicated that the plot to blow up the aircraft with liquid explosives was imminent. New restrictions were immediately imposed, including a ban on all hand luggage for passengers flying from British airports, but these strictures were gradually eased as new security systems were installed.

In October Reid responded to widespread public concerns about immigration by announcing restrictions on Bulgarians and Romanians going to work in Britain when the two countries joined the European Union in 2007. Controversy had been heightened by the number of work permits issued to people from Poland and other Eastern European countries that had joined the EU in 2004. The Home Office had predicted that around 13,000 permits a year would be issued to nationals of these countries. In August, however, the Home Office announced that it had, in fact, issued no fewer than 427,095 permits in less than three years. This influx provoked considerable debate, with public opinion divided between those who were grateful for the arrival of hard-working skilled manual labourers and those who were concerned at the impact of this new wave of immigration on housing and public services. By October the government had decided that it could not afford to take the risk of the immediate unrestricted entry of Bulgarians and Romanians when those countries joined the EU.

Also in October, Reid announced that he would commission ships to act as “floating prisons” to accommodate the rising numbers of people in British jails. By mid-October the number had reached almost the maximum physical limit of 80,000. Reid’s announcement failed to quell debate over what some critics regarded as the government’s failure to build enough new prisons, while other critics condemned it as a strategy of sending too many petty criminals to jail in the first place.

All three main political parties were embarrassed in 2006 by controversies over political funding. News emerged in March that the Labour and Conservative parties had received loans from wealthy individuals to help pay for their 2005 general election campaigns. Unlike gifts, which had to be declared by law, the loans were kept secret. The details were revealed when the House of Lords Appointments Commission rejected various people whom Blair had proposed as new peers, on the grounds that they had given undeclared financial support to the Labour Party. A police investigation was launched to decide whether the law prohibiting the “sale” of peerages had been broken. Senior figures in both the Labour and Conservative parties were questioned. On December 14 Blair became the first prime minister in modern times to be formally questioned by the police in the course of a criminal investigation. The fact that he was not cautioned indicated that he was regarded as a possible witness but not a suspect. Separately, in September the Liberal Democrats were embarrassed when their biggest donor, Michael Brown, was jailed for perjury and deception.

Debate intensified in 2006 over the nature of Britain’s multicultural society, especially the country’s Muslim community. (SeeSpecial Report.) There was mounting evidence of a backlash against what were perceived to be ghettoes of immigrants who, some claimed, received excessively favourable treatment from Britain’s public services (especially in the allocation of social housing) without a commensurate willingness to integrate into British society. In May the extreme nationalist, anti-immigration British National Party gained 27 seats in local elections in different parts of England. In the London borough of Barking and Dagenham, in the capital’s poor and ethnically diverse East End, the BNP gained 12 seats to become the main opposition to the local Labour council. Overall, as a proportion of the 4,400 seats across England that were being contested, the BNP’s performance was modest, but many mainstream politicians and commentators expressed concern that the party could achieve even this level of success.

On a happier note, Queen Elizabeth II celebrated her 80th birthday on April 21. Although the queen started to scale down her public duties, she still maintained a demanding schedule and gave no indication that she would abdicate, despite her age.

Economic Affairs

The U.K.’s economic growth rate recovered from 1.7% in 2005 to about 2.6% in 2006. Employment reached a new record of 29 million, but the labour force grew even faster, partly as a result of immigration from Eastern Europe, so the rate of unemployment also increased, to 5.5%. Inflation rose slightly during the course of the year, to 2.5% (a half point above the government’s target rate of 2%). In order to stem the rise in inflation, the Bank of England hiked its benchmark repo rate in August from 4.5% to 4.75% and in November to 5%.

Chancellor of the Exchequer Gordon Brown made it clear during the year that the level of borrowing, though within the European Union’s guidelines, meant that growth in public spending would have to be curtailed for the next few years. This did not prevent him from setting a new long-term objective for Britain’s state-funded schools to receive enough extra money to match the funding-per-pupil rate achieved in private schools, in which class sizes tended to be smaller.

Overall, the Organisation for Economic Co-operation and Development reported that public spending in the U.K. reached 42.4% of GDP in 2006, up from 39.3% when Labour came to power in 1997. Brown’s allies argued that this had been necessary to improve the country’s infrastructure and public services, but his critics argued that the increase threatened the U.K.’s international competitiveness.

Foreign Affairs

British troops continued to play a significant role in Iraq and Afghanistan. Britain had 7,200 troops in Iraq at midyear, mainly in Basra and the southeastern part of the country. This was less than half the number stationed in Iraq in 2003, shortly after the initial phase of the U.S.-led war, and British ministers indicated in late 2006 that they hoped that Iraq’s own police and security forces would become strong enough for most of the remaining British troops to be withdrawn within 18 months. The number of British troops in Afghanistan, however, increased substantially, reaching 5,600 in November. Of these, 1,300 were stationed in Kabul and 4,300 in the southern province of Helmand.

Britain’s military presence in both countries was a matter of domestic contention; opinion polls showed that a large majority of British voters believed that victory—over the insurgents in Iraq and the Taliban in Afghanistan—was not attainable and that the troops should be brought home within months rather than years. The controversies were intensified by a newspaper interview given on October 13 by Sir Richard Dannatt, chief of the British army’s general staff, in which he appeared to repudiate the government view that the U.K.’s presence in Iraq was vital to the fight against international terrorism. Dannatt said that British forces should be withdrawn “soon,” in part to allow more troops to be sent to Afghanistan, where he expressed greater confidence that with sufficient Western military force, the Taliban could be defeated.

Controversy also erupted when both Blair and his new foreign secretary, Margaret Beckett refused to condemn Israel’s invasion of Lebanon in July. The prime minister insisted that it was more important to keep channels of communication open to both sides and to exert pressure privately rather than to make public gestures. Blair announced that he would launch a diplomatic initiative to restart Middle East peace talks, and his foreign policy adviser, Sir Nigel Sheinwald, made a number of trips to the region, including a visit in late October to Damascus to meet with Syrian Pres. Bashar al-Assad.

Northern Ireland

On April 6 at a meeting in Armagh, N.Ire., Blair and Irish Prime Minister Bertie Ahern unveiled a new plan to restore devolution. The Northern Ireland Assembly, which had been suspended in October 2002, was scheduled to reconvene in May. If the parties could not agree on a new executive, then they would have until November to resolve their differences. If there was still deadlock, the Assembly would be wound up and its members’ salaries stopped.

On May 22 Ian Paisley, the leader of the Democratic Unionist Party (DUP), rejected a nomination from Sinn Fein to become first minister, with Sinn Fein’s Martin McGuinness as deputy first minister. Paisley refused to share power with people who, he said, “condoned and even planned murders, who robbed banks, who committed criminal acts and who will not support the police.”

With the November deadline approaching, Blair and Ahern brought Northern Ireland’s leading politicians together in October at St. Andrews, Scot., to try to break the deadlock. The two prime ministers announced a plan for reviving devolution, the two main requirements of which were that all parties accept the police and courts (which Sein Fein had been reluctant to do) and that all the main parties agree to power sharing (a stumbling block for the DUP). The blueprint, unveiled on October 13, called for the parties to respond by November 10 and to reach agreement on a first minister and a deputy by November 24. If this happened, a referendum on the new arrangements would be held, with the new Northern Ireland executive taking office in March 2007.

On November 24 Paisley finally acknowledged that he would accept nomination as first minister, with McGuinness as his deputy, provided that a number of conditions were met. The most significant of these was that Sinn Fein publicly carry out Blair’s wish that it accept the police and courts. Eventually, the pressure had its effect. On December 29 Sinn Fein’s leadership voted by 2–1 to convene a special party conference in January 2007 to debate a motion to “actively encourage everyone in the community to cooperate fully with the police services in tackling crime in all areas and actively supporting all the criminal justice institutions.” With the way apparently open to a full restoration of devolved government, Peter Hain, the U.K.’s Northern Ireland secretary, described this development as “seismic in its implications” for the province’s future.

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